We offer end-to-end support for your business — from setting up your company to obtaining licenses and managing bank account openings.
Company Registration and Support
for Foreign Businesses
in the Czech Republic
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Hub for IT, FinTech and crypto startups
No requirements for share capital
Developed infrastructure and highly skilled workforce
Possibility of remote registration
About us
LFT Advisors is a team of seasoned professionals specializing in international business. We assist entrepreneurs in structuring and growing their ventures effectively. Our experts, including lawyers, accountants, auditors, and tax consultants, work with you at every phase, ensuring reliable solutions and smooth operations.
What we do
We consolidate all essential services in one place, helping you reduce costs and avoid unnecessary red tape. Our “single window” service enables us to manage legal and financial tasks from company registration to securing the necessary permits and opening banking accounts.
Why choose us?
Tailored, transparent solutions that fit your specific business requirements.
Holistic support throughout the company registration and operational process.
In-depth knowledge of Czech legal and tax frameworks.
Proven experience with international businesses and startups.
Our Approach
- We start by analyzing your business goals and crafting a customized strategy.
- We evaluate your current business setup and create a detailed action plan.
- We handle the registration process, set up bank accounts, and guide you through licensing.
- We provide continuous legal assistance and expert consulting.
- We adjust strategies, measure success, and recommend growth pathways.
Why Starting a Business in the Czech Republic Is a Smart Choice
Entrepreneurs and investors are drawn to the Czech Republic for several compelling reasons:
- Economic Stability. The Czech economy remains strong and reliable, offering a solid foundation for new ventures.
- Government Support and Interest. The government actively supports business development, making it easier to launch and grow.
- Business-Friendly Legislation. The legal environment is favorable to entrepreneurs, providing ease of operation and growth.
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Interesting Fact:
Many multinational corporations have chosen Prague as their headquarters. The Czech Republic enjoys strong trade relations with Germany, Austria, Poland, and Slovakia. These ties help drive foreign investment, stabilize the economy, and offer opportunities for business expansion.
As a member of the European Union, the Czech Republic also allows entrepreneurs to benefit from both domestic and EU economic support. Moreover, the country’s low-interest rates on loans (ranging from 2% to 6%) further make it an attractive location for starting a business.
Benefits of registering a company in the Czech Republic
- Access to International Markets. The Czech Republic offers strategic access to European and global markets, expanding growth opportunities.
- Well-Developed Infrastructure. The country boasts an advanced infrastructure, including efficient transportation, communication, and logistics.
- Moderate Taxation. The Czech tax system is reasonable, with favorable rates for businesses, making it a cost-effective place to operate.
- Favorable Credit Conditions. Entrepreneurs can access loans at competitive interest rates, ranging from 2% to 6%.
- Tourism Potential The country attracts millions of tourists annually, offering unique opportunities for businesses in the tourism sector.
- Business Immigration & Residency Rights. Entrepreneurs opening businesses in the Czech Republic can qualify for a residency permit, making it easier to live and work in the country.
- Transparent Business Environment. The Czech Republic has a transparent business climate, fostering trust and stability for both local and international companies.
Step-by-Step Guide to Opening a Company in the Czech Republic
Before applying to the registration authorities, it’s essential to define your core business strategy and gather the necessary documents. Each case is unique, but the process generally follows several key steps.
1. Collecting Documents
This is the preparatory stage, based on the rules outlined above. The standard document package includes:
- Registration application
- Criminal record certificate
- Director’s consent for entry into the Commercial Register
- Property owner’s consent to provide a legal address
- List of business activities (just a simple list required for form completion)
- Passports of all founders and directors
Some documents require additional clarification:
- If registration is done through a representative, notarized copies of passports are needed
- Any documents not in Czech must have a certified translation
- For non-“free” activities, proof of qualification is required
Registration Application for S.r.o.
The application form for an LLC is particularly important. Printing and filling it out by hand has been prohibited. Information must be submitted exclusively online through the official government documentation system.
To complete the LLC application:
- Go to the official registry website
- In the bottom left, select from the dropdown menus:
– Typ podávaného návrhu: Prvozápis
– Požadovaná právní forma: Společnost s ručením omezeným - Click the Vytvořit návrh button
- At the top of the new page, select the court handling the registration
- In the second field (Druh podání), select Návrh
At any stage, the document can be saved without submitting. You can return to it later. For initial registration in the Commercial Register, it’s crucial to fill in the RZP identification code, found on the first page of the trade register extract (bottom left corner). Once completed, the form is sent electronically as an application for an appointment.
2. Visiting a Notary
For establishing an LLC (S.r.o.), all founders (or their representatives) visit a notary with the full document package. The goal is to draft, sign, and notarize the founding agreement (společenská smlouva), formalized in a notarial deed (notářský zápis).
The document will clearly define the founders, their shares, management structure, share capital, and other essential details. Each founder may receive a notarized copy, and one must be included in the main document package.
3. Visiting the Trade Licensing Office
This step involves submitting the complete document package to the local trade office (živnostenský úřad) and obtaining the Trade License Certificate (výpis z živnostenského rejstříku).
Before visiting, check the office’s opening hours—some only operate a few times a week. Find the nearest office and its schedule through this link. Depending on the workload, the certificate may be issued the same day or within 7–10 days.
Important note for sole proprietors (OSVČ)
When a foreigner registers as a sole proprietor, the trade license may be issued for a limited period, usually matching the visa validity. If no steps are taken to extend legal status or notify the trade office of changes, the license may be automatically cancelled.
4. Depositing Share Capital into a Bank
The share capital must be deposited into a special corporate account at a bank. A founder or director presents the notarial deed and passport at the bank. The result is a confirmation document proving the funds were deposited, which becomes part of the required documentation package.
5. Registering the Company with the Commercial Court
This step applies only to legal entities like LLCs. The relevant court was selected during the online application in Step 1. Founders must appear at the court with the full document package, now including the trade license and bank documents.
6. Registering with the Tax Office (Finanční úřad)
This step is required for all business types. However, note that this registration may have been completed automatically during previous stages, such as when obtaining the trade license.
It’s critical to confirm whether the tax registration was completed. If not, visit the tax office corresponding to the company’s legal address. Office locations and hours are available here. On-site, you’ll fill out a tax registration form. Registration takes 1–4 weeks, after which you will receive your tax identification number (TIN).
7. Other Registrations
Sole proprietors and LLCs with employees must register with the Social Security Administration (OSSZ). This might have been handled during earlier steps, but sometimes it requires a separate visit.
After completing these procedures, your Czech company is officially registered and ready for business.
Sure! Here’s the full translation into English with added advice on how to avoid each risk:
Potential Risks and Ways to Avoid Them When Starting a Business in the Czech Republic
Rising Electricity Costs
In recent years, businesses in the Czech Republic have faced increasing electricity expenses. For example, in 2021, companies with average consumption paid significantly less per kilowatt-hour than in 2023, when prices more than doubled.
How to avoid it: Choose energy-efficient equipment, negotiate long-term contracts with suppliers, and consider alternative energy sources such as solar panels to stabilize costs.
Changes in Tax Legislation
In 2024, the corporate tax rate increased from 19% to 21% as part of the government’s consolidation package. While this rate remains around the EU average, it is crucial for entrepreneurs to account for such changes in financial planning.
How to avoid it: Work with a local tax advisor who monitors legal updates, regularly review your tax strategy, and prepare financial reserves to cover higher tax liabilities.
Low Unemployment Rate
The Czech Republic has one of the lowest unemployment rates in Europe. Although this reflects a stable economy, it can make finding qualified staff difficult, potentially slowing business growth.
How to avoid it: Invest in employee training, offer competitive salaries, focus on employee retention, and consider remote or international hiring where possible.
Strict Inspections and Fines
In recent years, there has been an increase in business inspections, often triggered by complaints from customers or acquaintances. Fines for violations can be substantial, making legal compliance and timely reporting critical.
How to avoid it: Ensure accurate bookkeeping, follow all reporting deadlines, comply with labor and safety regulations, and consult with legal professionals for regular audits.
Liability for Business Obligations
The legal structure of your business affects the level of personal liability. For instance, with a limited liability company (s.r.o.), personal savings and property are protected. However, other business forms may expose owners to full liability.
How to avoid it: Choose a legal form that limits personal liability (like s.r.o.), maintain proper insurance coverage, and separate personal assets from business finances.
Dormant or Unused Companies
Having an abandoned or inactive company in the Czech Republic can lead to extra costs and liabilities. Undisclosed foreign assets may result in severe penalties, including visa denial and hefty fines.
How to avoid it: Regularly review your company’s status, officially close inactive businesses, file all required reports, and declare foreign assets properly.
Choosing the Wrong Legal Structure
Some business types, such as a joint-stock company (a.s.), require significant start-up capital and complex registration procedures. For new entrepreneurs, selecting the right legal form is critical to minimizing risks and optimizing benefits.
How to avoid it: Evaluate your business goals, consult with local experts, and choose a structure that matches your current capacity and long-term strategy. Start small with flexible forms like s.r.o. and scale later if needed.
Business Taxes in the Czech Republic: What You Need to Know
When starting a business in the Czech Republic, you will be subject to several types of taxes. Here are the key taxes you should be aware of:
Corporate Tax
The corporate tax in the Czech Republic is currently set at 21%. This tax is applied to the profits of a company, derived from all types of business activities, including the sale of goods and services, as well as income from investments. There are tax incentives available for small and medium-sized enterprises (SMEs) that reduce their taxable base. For example, companies involved in research and development can benefit from tax deductions.
It’s important to note that the Czech Republic has signed multiple international agreements to avoid double taxation, allowing businesses to avoid being taxed twice on the same income. The country also offers a depreciation system, enabling companies to reduce their taxable profit by writing off the value of their assets over time.
Road Tax
Road tax in the Czech Republic applies to companies that use vehicles for business purposes. The tax depends on the type and weight of the vehicle. Companies using trucks or larger commercial vehicles must pay this tax. The rates vary based on factors such as the vehicle’s weight, the number of axles, and fuel type.
The tax is applicable to vehicles registered under a legal entity and used for commercial purposes. It is not required for private passenger vehicles used for personal reasons. However, commercial vehicles used for transporting goods or passengers are subject to this tax.
Value Added Tax (VAT)
The Czech Republic has several VAT rates:
- Standard VAT rate – 21%: This rate applies to most goods and services, except for those with reduced rates.
- Reduced rate of 12% (instead of the previous 10% and 15%) for certain goods and services:
– food products, except for basic baby food and gluten-free food products
– non-alcoholic beverages
– takeaway food
– water supply;
– medical equipment for the disabled;
– child car seats;
– some domestic passenger transportation;
– etc.
Companies must register for VAT if their annual turnover exceeds a specific threshold, which for 2025 is approximately 2 million CZK (around 79 500 EUR). VAT allows businesses to claim back the tax they paid on purchases, and they charge VAT on their sales.
Excise Duty
Excise duty in the Czech Republic is levied on specific goods, such as:
- Fuel: Petrol, diesel, and other fuels used in the automotive and industrial sectors.
- Alcohol: Beer, wine, spirits, including vodka, rum, and other alcoholic beverages.
- Tobacco Products: Cigarettes, cigars, pipe tobacco, and other tobacco-related products.
Companies engaged in the production or importation of these goods must pay excise duty. The rates of excise tax depend on the type of goods and their volume or value. For alcoholic beverages, the tax rate is based on the alcohol content, while for tobacco products, it depends on the quantity and type of tobacco.
Excise duties are not only a source of revenue for the government but also a means of regulating the consumption of certain goods, such as alcohol and tobacco. Companies involved in the production or sale of these items must maintain strict records and comply with legal requirements.
Company Reporting in the Czech Republic
Tax declarations (Daňová přiznání in Czech) are official reports submitted to the Czech Tax Office (Finanční úřad), prepared based on your company’s accounting records.
Corporate Income Tax Return
The corporate income tax return must be submitted within three months after the end of the tax period.
The return must include three mandatory attachments for s.r.o. (limited liability companies):
- Balance sheet
- Profit and loss statement
- Notes to the financial statements (supporting documents and explanations)
Value Added Tax (VAT) Return
If the company is registered as a VAT payer, the VAT return must be filed by the 25th day of the month following the reporting period. The reporting period may be either monthly or quarterly, depending on your company’s setup.
Property Tax Return
This declaration is required if the company has acquired property or made changes to existing property during the reporting period. It must be submitted by 31 January.
The property tax return is generally filed once, with the tax paid annually thereafter.
This tax is not related to property sales or purchases.
Road Tax Return
This return must be submitted by 31 January if the company owned or used a freight vehicle (categories N2 or N3) during the reporting period.
Since 2020, passenger cars (category M1) are exempt from road tax in the Czech Republic.
If employees use their personal cars for business trips, no road tax declaration is needed, provided the vehicle is a standard passenger car.
Pension Insurance Registration Sheets
To cover all mandatory annual reports, it’s worth mentioning the pension insurance records submitted to the Czech Social Security Administration (ČSSZ). Employers must submit these records for their employees by 30 April each year. If an employee leaves the company, the employer must submit the report within 30 days of their termination.
Personal Income Tax from Employment (Employee Payroll Tax)
The annual payroll tax calculation for employees must be submitted electronically by 20 March.
For withholding tax (tax deducted at the source), the declaration is due by 1 April.
Employees can request their employer to process their annual tax reconciliation by 15 February. To do this, they must submit an application along with supporting documents like:
- Mortgage interest confirmations
- Pension insurance contributions
- Life insurance payments
- Donation receipts
Optionally, employees may also sign a statement confirming their taxable income for the current year.
